A Good Start...

Last week our market struggled, and there was the distinct possibility that the current low rates may not be available in the near future. Today, this fear has been curbed, as treasury yields turn South, and the mortgage backed securities market posts gains. We are now back at historic high levels, with the the 4.5 coupon trading at 103.31. 104.00 (just one tick away) we broke through earlier today, but saw a retraction. This price point is a level of resistance, which we have come across before.

The difference is today we are making a strong run at the 104.00 price, and could break through today. Here's my prediction... should the 10 year treasury yield fall back below 3.000% today, we will see the mortgage backed securities market break through the 104.00 resistance.

In closing, yes our market is back at its highs, but it is going to take a little time for rate sheets to catch up. I do expect better pricing to be published by lenders this afternoon, however... if our market holds at these levels for a day or two pricing will only continue to improve as banks stop hedging against the market.